US Bank Earnings Preview: What JPMorgan, Goldman, Citi & Wells Fargo Mean for the Economy

 

Six of the largest US banks report third-quarter results across two days next week. According to Reuters' October 8 preview, JPMorgan, Goldman Sachs, Citigroup and Wells Fargo report on October 13, with Bank of America and Morgan Stanley following on October 14. Wells Fargo's own earnings calendar notice confirms results at approximately 7:00 a.m. Eastern time with a 10:00 a.m. call.

 

What makes this reporting week worth front-running is the gap between estimates and share prices. The same Reuters preview puts expected profit growth for the largest banks at up to 20% year over year with no signs of credit deterioration, yet the KBW Bank Index has fallen roughly 13% from its August closing peak and 6% across the third quarter. The market is voting on a single question. With the ten-year Treasury yield at multi-decade highs, does higher-for-longer expand net interest income, or does it come back through deposit costs, a slower capital markets calendar and weaker credit? These results are the first chance to answer with numbers rather than guidance.

 

 

 

Rising estimates and falling share prices coexist. Reuters, citing LSEG consensus as of October 7, puts JPMorgan's Q3 EPS estimate at $5.94 against $5.07 a year earlier, Wells Fargo at $1.85 against $1.66, and Citigroup at $2.41 against $2.24, even as the bank index sits about 13% below its August high.

 

The curve is the source of the disagreement. Federal Reserve H.15 data show the ten-year Treasury yield at 5.28% and the two-year at 4.77% on October 7. The long end lifts asset repricing and marks down existing securities portfolios at the same time.

 

Investment banking guidance has rarely been this divided. JPMorgan expects Q3 investment banking fees and trading revenue each up a mid-to-high teens percentage, while Bank of America warned fees would drop at least 10% and Goldman Sachs flagged a muted quarter with FICC softer than a strong equities franchise.

 

Consumer credit is improving rather than deteriorating. The Federal Reserve's credit card delinquency series shows a 2.85% rate at all commercial banks in Q2 2026, an eighth consecutive quarterly decline from the 3.22% peak of Q2 2024.

 

Capital return room has already been cleared. The Fed's 2026 stress test results show all 32 tested banks staying above minimum CET1 requirements with aggregate CET1 falling 1.6 percentage points, and state the results will not change large-bank capital requirements.

 

The decisive information may not be in the quarter at all. The Federal Open Market Committee meets October 27 to 28, right after the reports, so management commentary on fourth-quarter margins, deposit costs and deal pipelines will matter more than the quarter just closed.

 

 

 

The density of this calendar is what gives it diagnostic value. The October 13 slate covers investment banking, trading, consumer lending and wealth management in a single morning, and October 14 fills in the rest. Because the six institutions carry very different balance sheet mixes, they produce six readings of one macro environment, which is why bank earnings season has long doubled as an economic check-up.

 

The useful exercise is not tallying which banks beat consensus. It is reading the six reports as answers to the same questionnaire: whether asset yields are outrunning funding costs, whether the capital markets recovery extends into the fourth quarter, and whether households are still paying on time.

 

 

Reuters quantifies the divergence. Profits at the largest banks are expected to rise as much as 20% year over year, while the KBW Bank Index has dropped about 13% from its August closing peak and 6% over the third quarter as bond yields reached multi-decade highs. UBS bank analyst Erika Najarian tied the selloff directly to the move in yields in a client note, and said investors need reassurance on three fronts: that the capital markets pipeline is robust, that loan growth is on track, and that deposit cost increases are contained.

 

In other words, the market does not doubt the third-quarter number. It doubts the durability of that number. With the long end parked above 5%, any crack in the chain gets amplified, and earnings are the only way to find out whether a crack exists.

 

 

 

Net interest income is the central variable. When assets reprice faster than liabilities, margins expand. Once depositors start shifting balances into money funds or term products, deposit beta rises and the margin improvement is consumed.

 

Industry data currently lean constructive. The Federal Deposit Insurance Corporation reported in its second-quarter banking profile that the industry net interest margin rose one basis point to 3.32%, aggregate net income reached $90.1 billion, up 12.0% from the prior quarter, return on assets was 1.37%, and domestic deposits grew 0.8% for an eighth straight quarterly increase. Deposits flowing in rather than out is the most direct evidence that funding costs remain under control.

 

Cheryl Pate, senior portfolio manager at Angel Oak Capital Advisors, struck a similar note in the Reuters preview, saying she does not expect large deposit flows from customers chasing yield or any drastic rise in deposit costs. The quarter still has to prove it, because September's hike was recent and deposit repricing typically lags by one or two quarters. Wells Fargo finance chief Mike Santomassimo told the Barclays conference in September that the third-quarter margin would come in better than initially expected, with full-year net interest income held around $50 billion.

 

 

Loan growth determines whether a better margin becomes real revenue. The same FDIC profile shows industry loans up 1.8% from the prior quarter and 6.8% from a year earlier, with growth described as widespread rather than concentrated. Santomassimo said Wells Fargo's 2026 loan growth would beat its earlier mid-single-digit guidance.

 

The significance for valuations is that higher rates have not yet killed credit demand. The signal to watch for is volume and price weakening together, where balances stall while margins peak, which usually means activity is contracting. That combination is not visible yet.

 

 

With the long end at multi-decade highs, the 2023 lesson resurfaces. Bond portfolios carry unrealized losses when yields rise, available-for-sale marks flow through other comprehensive income and erode tangible book value, and held-to-maturity positions, while not marked daily, convert paper losses into real ones if a sale is ever forced.

 

Pate offered a measured view in the Reuters report, noting that most banks have since reduced portfolio duration and managed the risk, so a repeat of 2023-scale damage is not expected. Shorter duration means the same yield move does less harm, which is not the same as no harm. What to check in the filings is the movement in other comprehensive income, disclosed portfolio duration, and whether management repositioned the book during the quarter.

 

 

 

Capital markets revenue carries the widest error bars this quarter. Reuters, citing LSEG data on October 1, reported global M&A up 28% year to date at $3.9 trillion, the highest for the period since 2001, while deal count fell 8%. Third-quarter volume was $993 billion, down 41% from the second quarter and the first sub-trillion quarter since Q2 2025. Equity capital markets raised $284 billion in the quarter, down 26% sequentially but up 39% year over year, and IPOs excluding SPACs reached $215 billion year to date, the most since 2021.

 

The picture is a market interrupted by rates: strong cumulative totals, a sharply slower third quarter. LSEG also shows deal count falling, meaning the growth is carried by a handful of very large transactions whose fees land unevenly across the street. Charlie Bouckaert, JPMorgan's global head of M&A, said in the same report that strong secular trends such as AI are driving activity and that 2027 should be another robust year, while Goldman's EMEA M&A co-head Carsten Woehrn said boards feel greater urgency to pull the trigger on strategic deals.

 

The yield spike already did visible damage. The Reuters preview notes that surging yields pushed back late-September listings including Oura and SB Energy, which moves underwriting fees between quarters.

 

 

September's Barclays conference produced unusually explicit and contradictory guidance. JPMorgan expects third-quarter investment banking fees and trading revenue each to rise a mid-to-high teens percentage. Bank of America chief executive Brian Moynihan warned that investment banking fees would fall at least 10% year over year with sales and trading roughly flat. Goldman Sachs chief executive David Solomon described a muted quarter with FICC softer on a relative basis while the equities business stays strong. Morgan Stanley pointed to a robust pipeline.

 

That spread carries more information than the aggregate. Under identical conditions, business mix is widening the performance gap: franchises weighted toward large-cap M&A and equities are benefiting, while those leaning on middle-market underwriting and fixed income market making are not. One bank's print will not describe the sector.

 

 

 

Citigroup's case comes with an explicit management benchmark. Chief financial officer Gonzalo Luchetti said in September that full-year return on tangible common equity should land slightly above the 11% target and that 2026 buybacks would exceed the $13 billion repurchased in 2025. He succeeded Mark Mason under the CFO transition announced in November 2025 and took the role in March, so this is the first full-year frame he owns, and the credibility of that guidance will get particular scrutiny.

 

Turning a watchlist into an executable plan beats chasing the headline after the print. See how to trade Citigroup and other US bank stocks on MEXC

 

 

 

Credit card delinquency is the cleanest test of whether higher rates have reached households. The Federal Reserve series for all commercial banks shows 2.85% in Q2 2026, below 2.91% in Q1 and 3.04% a year earlier, an eighth consecutive quarterly decline and 37 basis points off the Q2 2024 peak of 3.22%.

 

The New York Fed adds a second angle. Its second-quarter household debt report puts total household debt at $18.771 trillion, down 0.1% on the quarter, with credit card balances at $1.263 trillion, up $21 billion sequentially and $54 billion year over year, while the flow of card debt into serious delinquency ran at 6.97% annualized against 6.93% a year earlier. Balances rising while delinquency transitions hold flat says households are still levering up without a systemic break in repayment.

 

Provisions therefore become the judgment call in these reports. Building reserves while credit metrics are still improving signals that management's macro view for the fourth quarter has turned cautious. Goldman has already flagged higher provisions tied to a couple of idiosyncratic items, and the filings will show whether that is a one-off or a direction.

 

 

The June 24 stress test set the capital baseline. All 32 tested banks stayed above minimum CET1 requirements under the severely adverse scenario, aggregate CET1 fell 1.6 percentage points, and projected losses exceeded $708 billion, including about $200 billion on credit cards, $160 billion on commercial and industrial loans and $75 billion on commercial real estate. The scenario assumed unemployment peaking at 10%, house prices down 30% and commercial real estate down 39%. The Fed also stated the results would not change large-bank capital requirements, which stay in place until 2027.

 

The implication is straightforward. With requirements unchanged and results clean, buyback and dividend decisions rest on earnings and balance sheet preference rather than supervisory constraint. Citigroup's buyback guidance was issued against that backdrop. What to verify in the reports is each bank's actual CET1 ratio against its own target and the dollar value of repurchases executed in the quarter.

 

 

 

The most underrated risk is the lag. September's hike has not fully reached deposit pricing, so third-quarter margin improvement may prove partly seasonal, with funding costs catching up in the fourth quarter.

 

The second is the timing and concentration of capital markets revenue. Third-quarter M&A volume fell 41% sequentially, while fee recognition trails deal announcement, meaning this quarter's investment banking line largely reflects second-quarter activity and the slowdown lands later.

 

The third is the direction of rates themselves. If the long end keeps rising, securities marks deteriorate further and the valuation pressure on bank shares will not clear simply because one quarter looked good. For how a 5% ten-year transmits across financial and risk assets, see our breakdown of why Treasury yields are rising and what the move means.

 

 

In a confirmation case, margins improve broadly, loan growth holds at mid-to-high single digits, the capital markets divergence stays confined to Bank of America, and management guides the fourth quarter constructively. The 13% drawdown then looks like a rates-driven mispricing.

 

In a divergence case, capital-markets-weighted franchises deliver while traditional lenders miss on margin, valuation gaps widen inside the sector, and the index goes sideways even on decent aggregate earnings.

 

In a reversal case, deposit costs climb faster than guided or provisions rise more than expected, and with the long end still pushing higher, the market reads 20% profit growth as a cycle peak rather than a starting point, spreading the drawdown beyond financials.

 

 

The Fed released the September minutes on October 7, and their hawkish tone is already in risk asset pricing, as covered in our look at the market reaction to those minutes. Per the FOMC meeting calendar, the next decision lands October 27 to 28, just after earnings, so bank guidance on the fourth quarter and the policy path will be read against each other.

 

Labor data is the other verification chain. September payrolls added just 29,000 jobs, and the transmission from a soft print to rate expectations and asset quality is unpacked in our analysis of that employment report. If hiring keeps weakening while inflation stays sticky, banks face falling credit demand and elevated funding costs at once, which is the tail combination most worth tracking.

 

 

For James Mitchell, the real test is not how much profit grew but the quality of the net interest income behind it. Asset repricing is mechanical and arrives automatically once rates rise. Funding cost increases are behavioral and arrive when depositors decide to move. The third quarter sits in the first incomplete period after September's hike, which means the asset-side benefit has landed while the liability-side cost has not. Extrapolating this quarter's margin improvement into the fourth quarter is the easiest mistake available in these reports.

 

The second likely misreading is treating investment banking strength as a capital markets recovery. LSEG's data are explicit: year-to-date M&A up 28% while deal count fell 8%, and third-quarter volume halving sequentially. Totals are carried by a small number of very large transactions and fees are concentrated in a handful of advisers. JPMorgan guiding to mid-to-high teens growth and Bank of America warning of a double-digit decline are describing the same market. That is market share redistribution, not a disagreement about the cycle, and it limits what any single print says about the sector.

 

Three data combinations deserve tracking from here rather than any single line. First is the change in deposit costs relative to the change in asset yields, which sets the direction of the margin rather than its current level. Second is the gap between provisions and realized credit metrics: with card delinquency down to 2.85% after eight consecutive quarterly declines, any voluntary reserve build is management telling the market something about next year. Third is the move in other comprehensive income after an 80 basis point rise in the ten-year, which measures how well duration was actually managed, a question the market also ignored until 2023.

 

The cross-asset takeaway is that bank shares are currently the purest expression of rate risk. With the ten-year at 5.28%, the two-year at 4.77% and a term spread near 51 basis points, one curve simultaneously sets margin capacity, securities marks, the availability of acquisition finance and household debt service. When four revenue lines run off one variable, the sector's beta exceeds what fundamentals imply, and both drawdowns and rebounds overshoot. That is how estimates can rise 20% while the index falls 13%. For investors holding equities and crypto side by side, it is worth noting that the long end is becoming the shared pricing anchor across both, and bank stocks tend to react before risk assets do.

 

 

 

JPMorgan, Goldman Sachs, Citigroup and Wells Fargo report on October 13, with Bank of America and Morgan Stanley on October 14. Wells Fargo's own calendar notice confirms results around 7:00 a.m. Eastern time and a call at 10:00 a.m. Because six institutions report within forty-eight hours, the week is generally read as a combined diagnostic on US credit conditions rather than as six separate corporate events.

 

 

Reuters puts expected third-quarter profit growth at up to 20% year over year, yet the KBW Bank Index has dropped about 13% from its August closing peak and 6% across the quarter. The driver is the move in bond yields to multi-decade highs, which raises the risk that higher rates eventually come back through deposit costs, wider unrealized securities losses and a slower capital markets calendar. UBS analyst Erika Najarian attributed the selloff directly to the yield move.

 

 

Both, in sequence. When assets reprice faster than liabilities, margins expand first, which is the most likely picture this quarter. Deposit costs catching up, securities marks deteriorating and deal activity slowing on higher financing costs typically show up one or two quarters later. The judgment therefore rests on the pace of deposit cost increases relative to asset yields, not on the current margin level.

 

 

Net interest income and the sequential margin move, to see who is winning the repricing race; deposit costs and balances, to see whether customers are moving money; loan growth, to confirm credit demand; provisions, to read management's forward view; investment banking fees and trading revenue, to measure the divergence; and other comprehensive income, to gauge the damage to securities portfolios from the rate move.

 

 

Official data currently show improvement. The Federal Reserve's credit card delinquency series for all commercial banks stood at 2.85% in Q2 2026, an eighth consecutive quarterly decline from the 3.22% peak of Q2 2024. The New York Fed's second-quarter report shows credit card balances up $54 billion year over year while the flow into serious delinquency ran at 6.97% annualized against 6.93% a year earlier. Balances are growing without a corresponding break in repayment.

 

 

September guidance already makes that clear. JPMorgan expects investment banking fees and trading revenue each up a mid-to-high teens percentage, Bank of America warned fees would fall at least 10%, and Goldman expects a muted quarter with FICC weaker than equities. The backdrop is LSEG data showing third-quarter global M&A down 41% sequentially while year-to-date volume is up 28%, with totals carried by a few large deals and fees distributed unevenly.

 

 

Capacity is set by the stress test and by earnings. The Fed's June 2026 results showed all 32 tested banks above minimum CET1 requirements under the severely adverse scenario, with aggregate CET1 down 1.6 percentage points, and stated the results would not change large-bank capital requirements, which hold until 2027. With no supervisory tightening, Citigroup has guided to 2026 buybacks above the $13 billion repurchased in 2025, and the executed amounts at the other banks will show up in the quarterly filings.

 

 

The information above is provided for general market information and analysis only and does not constitute investment advice, financial advice, legal advice, tax advice or a recommendation to trade. Prices of equities, crypto assets and other related financial assets can fluctuate sharply, and past performance, analyst estimates and consensus forecasts do not guarantee future results. The reporting dates, consensus estimates, management guidance, regulatory data and industry statistics cited here reflect publicly available information at the time of publication, actual results may differ materially from expectations, and the companies' official filings and the latest releases from the relevant regulators should be treated as authoritative. Readers should conduct their own research and make decisions based on their own financial circumstances, investment objectives and risk tolerance, consulting a qualified professional where appropriate. The MEXC Crypto Pulse team accepts no liability for any direct or indirect loss arising from the use of this information.

 

 

James Mitchell specializes in technical analysis, market trends, and trading strategies for both Bitcoin and altcoins. Based in London, he has over 10 years of experience in financial markets. Before joining MEXC Learn, James worked as a senior analyst at a leading European investment firm, where he developed expertise in risk management and quantitative trading. His transition to cryptocurrency markets began in 2017, and he has since become recognized for his data-driven approach. He holds a Master's degree in Financial Economics from the London School of Economics. His analytical approach combines traditional technical analysis with on-chain metrics to provide readers with actionable insights.

 

Areas of Expertise: Technical Analysis, Market Trends and Cycles, Trading Strategies, Bitcoin and Altcoin Analysis, Risk Management.

 

 

 

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